Like the Federal Reserve’s fiat currency, the fractional reserve banking system is an officially sanctioned fraud. Banks are required to hold only a small portion of their advertised assets, and can issue loans amounting to many times the value of their actual holdings.

What would happen if our fractional reserve banking system underwent a systemic panic at the same time foreign governments demanded that the Federal Reserve return their gold deposits? We’re likely to find out, and it won’t be pretty.